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Insurance when buying a house

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Do I need insurance when buying a house?

Home insurance should be on your home-buying checklist. Although it might not be the main thing on your mind, you’ll want to have cover to protect your new home when you exchange contracts – and to give you peace of mind if things don’t go according to plan.
 
While it’s not a legal requirement for you to have buildings or contents insurance, if you have a mortgage your lender will usually insist you at least have adequate buildings cover in place. There are other types of insurance you might want to think about too.

What insurance will I need?

Buildings insurance
Covers the bricks and mortar of your home, along with any permanent fixtures and fittings, and should be enough to cover the cost of rebuilding it from scratch. This isn’t the same as the market value of the property – it’s usually less.

Contents insurance
To cover your possessions once you’re in your new home. 

Goods in transit insurance
You might want to protect your possessions if they’re being moved to your new home or are in storage. If you already have contents insurance, check whether your policy covers your belongings while they’re in transit from your old house to your new one. Some policies include this as standard, but may only cover you if a professional removal company is moving your belongings for you.

It’s also worth checking what cover your possessions will have if they’re going to be in storage.

When will I need to have home insurance in place?

You become legally responsible for your bricks and mortar the day you exchange contracts, so your buildings insurance needs to be in place from that date onwards. If you already own a property, you might need to overlap the insurance if there’s a period of time when you’re responsible for both your old and new property.

It's worth knowing that you don’t have to stay with the same insurance provider when you’re moving home. In fact, by comparing quotes, you could find a better deal.

But remember, if you change your insurance provider midway through your term, you may be charged a cancellation fee. It’s still worth doing a quote, though, to see whether any saving you’d get from switching makes the cancellation fee worthwhile.

Confirm the date you exchange contracts with your insurance provider/s, so you know you’re covered for the right property, at the right time.

Frequently asked questions

What does buildings insurance cover?

Buildings insurance is there to protect you, financially, if something happens to the structure of your property that results in repairs or, worst case scenario, a rebuild. It also offers cover for permanent fixtures and fittings, like your kitchen and bathroom.
 
Subsidence, flooding, fire and storm damage are all typically covered by your buildings insurance.
 
Your mortgage provider might suggest you take out their own insurance, but you don’t have to. You can choose from any home insurance provider and it’s worth shopping around to get the most suitable deal.
 
Remember, when calculating your buildings insurance you need to base the cover amount on the rebuild cost of your home, not its market value.

Do I need home insurance when buying a leasehold property?

If you’re buying a leasehold property, like a flat in a building, you may need to insure parts of the building you’re legally responsible for. You’ll need to check the terms of your lease.
There may be communal areas of the building owned by the freeholder - who’s usually responsible for the overall structure of the building – and you might find you have to pay a service charge that includes a contribution towards buildings insurance. If this is the case, be sure to ask for a copy of the policy for your own records. Your solicitor should take care of this for you, since the mortgage provider may want to register the freeholder’s insurance.

Is it worth getting contents insurance when buying a home?

It certainly is. Without it, you’ll have to fork out the cost of replacing your possessions if they’re damaged, lost or stolen. So, while you’re not legally required to take out contents insurance, not doing so could be risky.

If you don’t already have contents insurance, it’s a worthwhile consideration before you move home. Shop around, so you know you’re getting the right deal for the level of cover you need.

If you already have contents insurance, make sure you tell your provider that you’re moving. Your premium may go up or down if you’re moving to a different area or a smaller or larger property.

What is home buyer protection insurance?

This can cover you if your home purchase falls through – for example, if the seller pulls out or if they accept a higher offer. It allows you to claim back some upfront costs, like valuation and conveyancing fees, up to certain limits.

What other insurance might I need?

Becoming a homeowner will more than likely make you responsible for a mortgage, so you might also want to consider insurance that can cover your repayments if you’re unable to make them. This might be the time to consider taking out:

Mortgage protection insurance
This can cover the cost of your mortgage if you lose your job or are unable to work because of illness.

Life insurance
Can be used to clear your debts, including your mortgage, if you’re no longer around.

How much does buying a house cost?

Buildings insurance could cost from £110 per year^^

Contents insurance could cost from £70 per year^^^

Combined buildings and contents insurance could cost from £142 per year^^^^

 ^^50% of people could achieve a quote of £110 per year for their buildings home insurance based on Compare the Market data in February 2020.
 ^^^50% of people could achieve a quote of £70 per year for their contents home insurance based on Compare the Market data in February 2020.
 ^^^^50% of people could achieve a quote of £142 per year for their buildings and contents home insurance based on Compare the Market data in February 2020.

The cost of home insurance is determined by a number of factors. With buildings insurance, the price is calculated according to how much your house would cost to rebuild, plus your postcode among several other factors.

With contents insurance, the value of your possessions and where you live are also taken into consideration. In both cases, whether you’ve made claims in the past will likely be taken into account.

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What do I need to get a quote?

It’s easy to get a home insurance quote with us. You’ll just need to:

  • give us some details about your new home
  • tell us its rebuild value (we’ll help you with this)
  • choose the level of cover you need. 

If you already have home insurance, it could be helpful to have your current policy documents handy too. 

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Why use Compare the Market?

Compare prices from 75 provider products**

Get a quote in less than 11 minutes***

50% of customers could save up to £105 on their home insurance****

**Correct as of February 2020.
***On average, it can take less than 11 minutes to complete a home insurance quote through Compare the Market based on data in February 2020.
****Based on Online independent research by Consumer Intelligence during February 2020 50% of customers could save up to £105.35 on their home insurance premium.

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Home insurance providers

We compare prices from 75 leading home insurance provider products, including Admiral, Churchill, John Lewis and the Post Office.

Chris King

Home insurance expert

What our expert says...

“Buying a new home is hugely exciting – but it can also be nerve wracking. If you get your buildings and contents insurance in place, it’s one less thing to worry about. And don’t forget that buildings insurance for your new home must be in place as soon as you exchange contracts – otherwise you could be seriously out of pocket if something happens to your new property.”   

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